A rational approach to alcohol taxation


The UK’s system of alcohol duty is both excessive and irrational. Duty collected on alcohol exceeds the costs incurred to public services caused by alcohol-related crime and health problems by 130% – or £6.1 billion annually – and yet some strong ciders are under-taxed. A new report from the Institute of Economic Affairs calls for a flat rate of 9p on every unit of alcohol. This would raise the £4.6 billion needed to offset the costs of drinking to public services. It would incentivise innovation in the alcohol industry and reduce tax evasion.

 

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